Zero-tariff policy leads to huge savings in Hainan FTP

So far, enterprises taking advantage of the zero-tariff policy (one of the essential policies for the early development of the Free Trade Port in China's southernmost province Hainan) has led to tax savings valued at CNY 462 million (about USD 71.26 million). Helping to reduce the operation cost of enterprises, the policy is attracting both capital flow and talented personnel to the tropical island.

According to the master plan released on June 1, 2020, China intends to develop the island province into a "globally influential, high-level free trade port, where goods and items under the management of zero-tariff lists will be exempt from import duties, import value-added tax (VAT) and consumption tax." 

The free trade port has one zero-tariff negative list and three zero-tariff positive lists with the negative list applying to production equipment imported by enterprises for own use; and the positive lists applying to the following goods:

(1)Raw and auxiliary materials imported for manufacturing for own use, or in import-process-export manufacturing and processing, or in import-service-export service trade ; 

(2)Ships, aircraft, yachts and other means of transport imported to Hainan for transportation and tourism ; 

(3)Imported goods consumed by residents of Hainan.

Coming into effect in November 2020, December 2020, and March of this year, Hainan has so far seen the implementation of the first three lists as part of a test operation before island-wide customs clearance comes into effect. In the meanwhile, the province is speeding up the formulation of a fourth and final list.